FEELINGS of cheer this holiday season might be the warmest and most widespread in farm country in recent memory.
The curtain is closing on a year that might mark a reversal of fortune for prairie farmers. Optimism is in the air.
This time last December, it would have been easy to become depressed by a year when crop quality was below average, large portions of Manitoba could not be seeded, BSE cases were still threatening cattle markets and farm incomes were dismally low.
Crop problems, animal disease and inadequate farm income did not disappear in 2006, but significant improvements were logged.
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In most regions, the weather co-operated, allowing farmers to harvest a large quality crop.
And in a rare coincidence, that large crop was accompanied by rising grain prices sparked by tight supplies and growing demand, particularly from the biofuel sector. Global investment funds saw a hot market and piled on, driving prices higher.
With biofuel demand expected to increase for several years, prospects are good for continued strong prices.
There is positive news on the cattle front too. Since the U.S. border reopened for young cattle, fed prices have recovered to near pre-BSE levels. International buyers returned to breed shows and sales at major fall fairs this year.
The recovery will likely spread to non-fed cattle early in 2007 when the United States is expected to open the border to older-than-30 month cattle.
Expansions at slaughter plants and new producer-owned facilities mean that Canada is not so dependent on exports of cattle to abattoirs in the U.S.
Speaking of processing, there is unprecedented investment in value added capacity in the grain industry, driven by biofuel and a new emphasis on healthy food.
Corporate entities are building or already producing ethanol, while some locally planned projects are well into financing drives.
Biofuel is also behind what would be the largest agribusiness project ever built in Canada, a proposed $400 million project in Alberta, with a canola crusher, biodiesel and ethanol refineries.
Biodiesel could help make canola the hottest crop in 2007, as could a possible opening of the European Union to genetically modified canola as early as next summer and fear of trans fats.
Hydrogenated vegetable oils with trans fat are a major cause of heart disease and governments want to control or eliminate them.
Canadian low linolenic canola varieties are the healthiest substitute, combining no trans fat, low saturated fat and high stability. They are expected to generate strong demand and canola plants in Canada are expanding to meet it.
Two new large plants have been announced for Yorkton, Sask., and other projects are rumoured.
Industries that serve agriculture also had a good year.
The shift to all-electronic trading at the Winnipeg Commodity Exchange turned out to be a success. Most grain companies posted stronger profits.
The transportation and handling system performed without the tie-ups or strikes that marred previous years.
A needed renewal of the Canadian Grain Commission is underway.
The booming energy economy has provided opportunity for off farm jobs.
The pork industry is the one troubled sector this season as major packers downsize and restructure. We hope it will emerge stronger from the restructuring.
Improvements in crop quality and prices and in cattle markets should spark the long awaited improvement in farm incomes in 2007.
And there is hope that the next generation of farm income support programs will better meet producers’ needs now that governments appear to realize that base support plans need the backstop of disaster programs and provincial companion plans.
The year has not been perfect. There is the controversy over the Canadian Wheat Board and uncertainty over Manitoba’s suspension of hog barn development. Some regions need more moisture and others less.
But overall, there is much to be thankful for this holiday season and much to look forward to in 2007.
With that in mind, all of us at The Western Producer hope all of you enjoy a safe and happy Christmas with family and friends.
Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Ken Zacharias collaborate in the writing of Western Producer editorials.
